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International Optimization

Client:

Global 1,000 Corporation with $16 Billion in annual sales and operations in 34 countries

Problem:

Client maintained multiple suppliers with their office supply program, including one for North America and a handful in Europe. Although their sourcing strategy was successful in North America, there were several challenges experienced in their European locations. They often found inconsistency in both the pricing and reporting provided as well as significant rogue spend in various countries. Our Client’s goal was 2 fold: 1) validate the competitiveness of their current fragmented program 2) determine if there is one supplier that could service at least 90% of their international program and do so with consistency in pricing, service and reporting.

Solution:

CenterPoint conducted a Comprehensive Analysis of both the North America and European historical purchases and established specific insight into the dynamics of their overall Office Supply program. Included in the review was a complete benchmarking of all pricing, terms, conditions and reporting associated with the program. Armed with a clear picture, CenterPoint provided a series of assessments and recommendations that revolved around the future optimization of the program and utilization of Client’s significant purchasing power. Additionally, CenterPoint developed a short list of suppliers that were capable of servicing at least 90% of Client’s international purchasing volume. Thereafter, a thorough bid process ensued and the contract was awarded to a single supplier that was able to create the greatest value.

Results:

Through this exercise, our Client was able to consolidate approximately 93% of their international spend with one Supplier. The implementation of an optimized core list resulted in an increase of their blended core ratio from 49% to over 70%. Accountability related to reporting and compliance was enhanced and resulted in greater visibility and sustainability. Consequently, issues with service, consistency and transparency were greatly reduced. Most importantly, they were able to secure significant savings through enhanced pricing and sustainability for years to come.

Metrics:

  • Pre – CenterPoint Office Supply Spending: $9.5 Million
  • Post – CenterPoint Optimization Spending: $7.2 Million
  • Savings: $2.3 Million (24.2%)

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